Work out your tax residency
You can use the residency tests to work out if you're:
- an Australian resident for tax purposes
- a foreign or temporary resident for tax purposes.
You can also be a temporary resident if you an Australian resident or a foreign resident for tax purposes.
We don't use the same rules as the Department of Home Affairs. This means you:
- can be an Australian resident for tax purposes without being an Australian citizen or permanent resident
- may have a visa to enter Australia but are not an Australian resident for tax purposes.
For a summary of key information about residency status, download Residency for tax purposes (PDF, 296KB)This link will download a file. This information is also available in Arabic, Chinese, Japanese, Korean and Vietnamese, go to Other languages.
If you're a working holiday maker, see Working holiday makers.
See 408 Pandemic event visa if you were issued a 408 visa to stay in Australia and continue working during the COVID-19 pandemic. You can’t apply for a 408 visa on or after 1 February 2024.
Residency tests
There are statutory tests to determine your residency:
You can also use our work out your residency status for tax purposes tools to help work out your residency.
Resides test
The primary test of tax residency is called the resides test. If you reside in Australia, you're an Australian resident for tax purposes and you don't need to apply any of the other residency tests.
Some of the factors that can be used to determine residency status include:
- physical presence
- intention and purpose
- family
- business or employment ties
- maintenance and location of assets
- social and living arrangements.
If you don't satisfy the resides test, you'll still be considered an Australian resident if you satisfy one of 3 statutory tests.
Domicile test
You're an Australian resident if your domicile (the place that is your permanent home) is in Australia, unless we are satisfied that your permanent place of abode is outside Australia.
A domicile is a place that is your permanent home by law. For example, it may be a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent).
For more information about this test, see the domicile test.
183-day test
This test only applies to individuals arriving in Australia. You will be a resident under this test if you're actually present in Australia for more than half the income year, whether continuously or with breaks. unless it is established that your ‘usual place of abode’ is outside Australia and you have no intention of taking up residence here.
For more information about this test, see the 183-day test.
The Commonwealth superannuation test
This test applies to Australian Government employees working at Australian posts overseas and who are members of the CSS or PSS schemes. It does not apply to members of the PSSAP scheme. If this is the case, you (and your spouse and children under 16) are a resident of Australia regardless of any other factors.
For more information about this test, see the superannuation test.
Example: Australian resident under the domicile test
Emily leaves Australia to work in Japan as a teacher of English. Emily has a one-year contract after which she plans to tour China and other parts of Asia before returning to Australia to continue work here.
Emily lives with a family in Japan during her time there and rents out her property in Australia. Emily is single. Her parents live interstate and her brother has moved to France. Emily is an Australian resident for tax purposes even though she is residing in Japan because, under the domicile test:
- her domicile is in Australia (as she is a resident who has lived in Australia and will generally retain a domicile here when absent overseas), unless she chooses to permanently migrate to another country)
- her permanent place of abode remains Australia.
Example: Foreign resident for tax purposes
Bronwyn, an Australian resident, receives a job offer to work overseas for 3 years, with an option to extend for another 3 years. Bronwyn, her husband and 3 children decide to make the move.
They rent out their house in Australia as they intend to return one day. While overseas they rent a house with an accommodation allowance provided under Bronwyn's contract.
Bronwyn is unsure if she will extend her contract to stay for another 3 years. She will decide later depending on how the family like life.
Bronwyn is a foreign resident for tax purposes because she does not satisfy 'the resides' test. This is due to:
- the length of her physical absence from Australia
- other circumstances not being consistent with residing in Australia, even though she has retained the family home – such as
- establishing a home overseas with her family
- renting out her family home in Australia.
Bronwyn has also not satisfied the domicile test, as:
- her permanent place of abode is outside Australia due to
- the length of time committed to being overseas
- the establishment of a home overseas
- her family going with her overseas
- the fact that she won't be selling the family home in Australia, although relevant, is not persuasive enough to overcome the finding on the basis of the other factors
- it can be argued that she has abandoned her home in Australia for the duration of her stay, by renting it out.
Failure to cut connection with Australia
A legal decisionExternal Link in 2013 shows that a person who fails to cut their connection with Australia will be treated as an Australian resident.
If your residency status changes during the year
If your status has changed from resident to foreign resident during the income year, answer 'yes' to the question 'Are you an Australian resident?' on your tax return.
This ensures you're taxed at resident rates for the income year. You're entitled to a pro-rata tax-free threshold for the number of months you're an Australian resident.
Foreign residents don't have to pay the Medicare levy. In your tax return you can claim the number of days in the income year that you're not an Australian resident as exempt days.
From the date you cease to be an Australian resident, there is no need to show your foreign-source income in your tax return. Also, all Australian-sourced interest, dividends and royalties you received after you ceased to be an Australian resident are subject to the withholding tax provisions as a final tax. They should not be included in your tax return.
If you have a Higher Education Loan Program (HELP) or VET Student Loan (VSL), Australian Apprenticeship Support Loan (AASL) (formerly Trade Support Loan) debt you'll need to include these amounts as they're used to work out your worldwide income and your repayment obligations against these debts.
If you are or become a foreign resident and you want more information about capital gains tax, see Foreign residents and capital gains tax.
For more information about foreign employment income being exempt from tax, see Tax exempt income from foreign employment.